Intellectual Property Laws Amendment Bill 2002

Bills Digest No. 39 2002-03

Intellectual Property Laws Amendment Bill
2002

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

The Patents Act 1990, Trade Marks Act
1995, and Designs Act 1906 with their subordinate
regulations, supply the legislative basis for the patent, trade
mark and design systems of Australia. A key aspect of these regimes
is the making and processing of applications for granting patents
or registration of trade marks or designs. As these Acts are
concerned with obtaining property and other valuable rights filing
dates and time periods assume importance. For example in the case of trade marks, the
applicant lodges details of the trade mark and specifies with which
goods and services the mark is associated. The Trade Marks Office
checks the application against statutory criteria and exclusions.
If accepted, the application is advertised in the Official Journal
of Trade Marks (the Official Journal). Opponents have three months
to object to registration on specified grounds, but if there is no
successful opposition the trade mark is registered from the date of
filing the application.

The importance of dates and time periods is also
reflected in the provisions contained in all three Acts that grant
an extension of time under certain circumstances. For example under
subsection 27B(1) of the Designs Act a person must be granted an
extension of time if a relevant time period was not complied with
because of an error or omission by the Registrar, a Deputy
Registrar, or an employee in the Designs Office. Item
1 repeals and replaces this subsection to clarify that
extensions of time must also be granted if the error or omission is
caused by a person providing or proposing to provide services for
the benefit of the Designs Office. Items 2 and 5
make similar amendments to subsection 223(1) of the Patents Act and
subsection 224(1) of the Trade Marks Act respectively.

According to the Explanatory Memorandum, the
Patent, Trade Marks and Designs Offices often use the services of
independent contractors or consultants during the processing of
applications, such as the use of a courier service to transport
documents from a sub-office to the central office in Canberra, or a
private company for maintenance of information systems or storage
of data.(1) The proposed amendments in items 1,
2 and 5 will clarify that the extension of time provisions
encompass errors and omissions by these parties.

Items 3 and 4 are consequential
amendments to item 5 and remove the term `trade
marks officer' from the Trade Marks Act. These concepts have been
moved to the new definition of employee (item 6 of Schedule
2). An employee is to be a person, other than the
Registrar of Trade Marks or a Deputy Registrar, who is a person
employed under the Public Service Act 1999 and is employed
in the Trade Marks Office, or is not such a person but performs
services in that Office, for or on behalf of, the Commonwealth.

In 2001 the Parliament passed the Patents
Amendment Act 2001 ('2001 Act'). The main purpose of that Act
was to raise the threshold for obtaining a patent, so as to
increase the likelihood that granted patents are valid. Of
relevance to this Bill, the 2001 Act contained amendments that
affected the search and disclosure patent requirements.

Because patent applications are assessed against
the existing state of knowledge, searches to ascertain the state of
that knowledge are integral to the patent system. As the Patents
Office has stated:

The objective of any search is to discover the
prior art which is relevant to the determination of whether the
claimed invention is lacking in novelty or an inventive step . That
prior art may be in the form of patent documents or articles from
periodicals and other non-patent literature (2)

Prior to the 2001 Act, under subsection 45(3),
the Commissioner of Patents could direct an applicant to
provide the result of searches carried out in other countries for
applications filed outside Australia about the same invention.

Subsection 45(3), as amended by the 2001 Act,
requires that an applicant for a standard patent or an
innovation patent provide the Commissioner with the results of any
searches of the prior art base that have been made in relation to
the application, or in any corresponding application filed
overseas.

The rationale for this change was that the
previous subsection 45(3) with its confined operation, denied the
Patent Office valuable information which is readily available
particularly information which emerges during the processing of
applications in overseas jurisdictions. This is information of
which the applicant is aware but which the Patent Office may not
discover through its one-off search process.(3)

During its passage though the Parliament, the
2001 Act, (or, as it was then, the Patent Amendment Bill 2001), was
referred to the Senate Economics Legislation Committee for
consideration.

While all submissions to the inquiry supported
the 2001 Bill s intention of strengthening Australia s patent and
intellectual property system there were significant concerns
expressed about lack of clarity and other defects in the wording of
the Bill.(4)

In relation to the amendments to subsection
45(3) two concerns were raised in evidence to the Senate Committee
the burden on applicants and the unclear scope of the required
searches.

Burden on applicants

The first concern relates to the burden placed
on an applicant to provide all searches made within its
organisation, whether or not these are known to the inventor. Take
for example, the situation where a university is a patent applicant
and the inventor is a staff member. The university is obliged,
under the terms of the 2001 amendment, to disclose all searches
that relate to the application even if these searches have been
made by individuals other than the inventor, and are not known to
the inventor.

In this connection, the Australian Academy of
Science observed:

It will be difficult in practice for an academic
research entity to organise and fund search activity in a way that
will satisfy this provision. It will also be difficult in practice
to identify all relevant searches conducted by lab researchers
given the high level of research-related search activity commonly
undertaken. It may put an unfair burden on applicants to assume
part of the job of patent examiners and jeopardise foundation
intellectual property generated in the public sector.

The Academy noted that the amendment was of
particular concern in the light of amendments to section 102, which
have the potential to impose penalties if there are oversights in
disclosing search results to the Patent Office.(5)

Unclear scope of
searches

A second criticism of the 2001 amendment was
that the scope of the searches in respect of the complete
application or in respect of the provisional application is
unclear. The lack of clarity arises on two grounds. One is that
searches are normally conducted on the invention, whereas the
application may contain other information that is also the subject
of searches. The Institute of Patent and Trade Mark Attorneys
(IPTA) noted that the intention of the subsection would be met, if
the results of the searches to be disclosed were restricted to the
claimed invention itself rather than extended to the application as
a whole.(6)

Both the Law Council and IPTA further expressed
concern that the wording of the amendment left open the possibility
that a great deal of irrelevant information, discovered during
preliminary searches and discovered through any source (rather than
discovered by specified patent offices), must be disclosed. They
claimed that the requirement to disclose all search information
would impose an unnecessary burden on applicants and on the Patent
Office itself.(7)

The Senate Committee agreed with these
submissions that the new section would place an increased burden on
the research sector as a consequence of the proposed requirement
that applicants search for relevant prior art. The Committee
therefore considered that this aspect of the new provisions should
be monitored and, if a significant level of concern is expressed,
that it be subject to review two years after the commencement of
the Act.(8)

It is of interest that the Government has not
waited for the two year review. Rather the proposed amendments to
subsection 45(3) and section 101D contained in this Bill are
intended to address some of the concerns raised by the Senate
Economics Committee.

Item 2 repeals and replaces
subsection 45(3) so that an applicant for a
standard patent must provide the Commissioner of Patents with the
results of any searches conducted by, or on behalf of, a foreign
patent office and any prescribed searches. The required searches
are limited to those carried out for the purposes of assessing the
patentability of an invention disclosed in the complete
specification or in a corresponding application filed overseas. In
each case, the searches required are limited to those completed
before the grant of the Australian patent.

Similarly item 3 repeals and
replaces section 101D so that a patentee(9) must
provide the Commissioner with the results of any searches conducted
by, or on behalf of, a foreign patent office and any prescribed
searches. The required searches are limited to those carried out
for the purposes of assessing the patentability of an invention
disclosed in the complete specification or in a corresponding
application filed overseas. In each case, the searches required are
limited to those completed before the issue of a certificate of
examination on the patent.

Item 4 is consequential on
items 2 and 3 and adds the term `foreign patent
office' to the definitions in Schedule 1 to the Patents Act. This
term is intended to cover all overseas patent offices, including
regional offices which grant patents in respect of more than one
country.

Item 5 has the effect that the
amendments relating to disclosure of information will apply to all
patent applications made since the Patents Amendment Act
2001 came into effect (ie 1 April 2002). As the Explanatory
Memorandum states:

This will mean that the new disclosure
arrangements will completely replace the old and any obligation on
an applicant or patentee to comply with the old provisions will be
replaced by an obligation to comply with the new provisions. In
addition, subitems (3) and (4) provide that any information
provided under the old provisions is taken to have been provided
under the new provisions and therefore does not need to be
submitted again.(10)

Submissions to the Inquiry also expressed
concern about the piecemeal adoption of the recommendations of the
reports of the Intellectual Property and Competition Review
Committee (IPCRC) and the Australian Council on Industrial Property
(ACIP), and the failure of the amendments proposed to fully reflect
the reasoning of those review recommendations.

Subsection 102(2C) prevents a patent owner from amending their
patent after grant if they had previously failed to disclose prior
art information. Thus, if the undisclosed information invalidated a
patent or part of it, the patent could not be amended to remove the
grounds of invalidity. The subsection further provides for a
penalty if the information contained in the non-disclosed search
results invalidates the patent on the grounds of novelty or
inventiveness.

Senate Economics Legislation Committee, Op cit, para
1.45.

ibid., para 1.47.

ibid., para 1.52.

A patentee is defined in the Patents Act as the person for the
time being entered in the Register as the grantee or proprietor of
a patent.

Mary Anne Neilsen
24 september 2002
Bills Digest Service
Information and Research Services

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